Elon Musk, co-founder and CEO of Tesla Motors, speaks at the 2015 Automotive News World Congress on Tuesday in Detroit.Forbes.com: Tesla Motors CEO Elon Musk, in Detroit to urge automakers to increase their investment in electric cars, said his company could build as many as 2 million cars by 2025, which would require factories in China, Europe and a second U.S. location, most likely on the East Coast.
Such production would be a huge leap for Tesla, which is producing only about 30,000 cars a year now and has yet to earn a profit. Musk said the company is “cash-flow negative” because it is spending heavily to create new models and expand its production capacity. He added that Tesla is on track to sell 500,o00 cars by 2020, and said ”at half a million cars a year, we should be profitable” using generally accepted accounting principles. In the first nine months of 2014, Tesla had revenue of $2.24 billion, up 60% from a year earlier. Its net loss grew to $186.4 million from $57.7 million.
Musk was a keynote speaker at an industry conference sponsored by Automotive News, which coincided with the media preview for the annual North AmericanInternational Auto Show in Detroit, which draws more than 5,000 journalists from around the world.
In a crowded press conference later, Musk praisedGeneral Motors' CEO Mary Barra for unveiling a $30,000 concept car with a 200-mile battery range, but said Detroit needs to step up its investment in plug-in cars. “It’s important for leaders of the three carmakers to accelerate their investment in electric cars in a serious way – I’m not talking about the minimum number of cars for compliance.” In his view, “serious production” would be at least 250,000 EVs a year, which is what’s necessary to make a profit anyway. “It’s a bet,” he said, “but it’s a good bet.”
In an odd bit of timing, while Musk was extolling the benefits of electric cars, his company’s stock price was plummeting on earlier comments he made to the Wall Street Journal about lower-than-expected sales in China. Tesla’s shares were down 7% in after-hours trading to $189.95. During the press conference, he sought to clarify his remarks, calling the soft sales in China a “temporary” problem caused by a “misperception” among Chinese consumers about the difficulties of charging an EV. He said the company is working to improve communications with consumers, and has installed super-chargers to allow long-distance travel across China, while also adding a more luxurious “executive seat” in the rear of its flagship Model S.
Musk said a long-delayed SUV, the Model X, would finally be ready this summer, saying he wanted to make sure that quality was perfect, mentioning extra work, for example, to ensure proper operation of its unique gull-wing doors. “This car is really good, and I don’t say such things lightly.”
